Report Analyzes Explosive Single-Cup Growth, Predicts Continuation

ROCKVILLE, MD -- Total U.S. coffee market dollar sales grew 10% in 2012, attributable primarily to a dramatic jump in the single-cup segment, according to a new report from market research firm Packaged Facts.

The single-serve market posted a compound annual growth rate of more than 75% between 2007 and 2012 in tracked mass-market channels, according to the report, titled Single-Cup Brew Beverage Products in the U.S.
Packaged Facts estimates that overall retail single-cup coffee sales in the U.S. jumped by 82%, from $1 billion in 2011 to more than $1.8 billion in 2012, and will reach a projected $5 billion by 2016.

"Proven market performance and the expiration of an important K-Cup patent in September 2012 has led to a new round of marketplace competition, motivating long-standing category participants to step up their competitive strategies," according to Packaged Facts research director David Sprinkle. "One feature of this competition has been an influx of private-label and unlicensed beverage pods that work in Keurig K-Cup brewers."

New, more sophisticated and specialized single-cup brewer technology keeps elevating the quality of coffee made at home, while single-serve beverage manufacturers and marketers continue to broaden the array of products specifically designed for them, according to the Packaged Facts report. This increases the range of successful products, brand entrants and satisfied consumers.

While coffee beverages still predominate for single-cup brewers, other beverages including tea, cocoa and chocolate, hot and cold fruit drinks, and specialty wellness beverages are increasingly available, the report notes.

Several factors will continue to contribute to the continued growth of the single-cup beverage market, Packaged Facts predicts. They include a nation of increasingly discerning coffee drinkers with the desire to recreate coffee-shop quality at home. Continued adoption of single-serve brewers in offices and hotels also will continue to fuel growth, as will innovations in brewer technology that support enhanced beverage quality, along with an expanding selection of single-serve beverage options.